Why We Exist
The most important aspect of preserving your reputation is litigation avoidance and when you are faced with client arbitration, or litigation we have professional resources to get you through what can be a miserable experience if not handled effectively.
FA RISK is in the business of empowering our members to their greatest potential and mitigating the risk to their lifestyle. Our members enjoy and experience peace of mind derived from the knowledge that if a claim from their client is made against them FA Risk Management is there to support them. We stand with our members during their darkest hour. When that claim is made (and it will be someday) FA RISK will be there with expert consultation, access to superior legal services, and money.
We share the pain, legal pressure and expense with our members.
Legal fees can quickly add up and destroy lives, businesses, and families. These are unavoidable expenses in the event of litigious action, however they can be mitigated. Most clients, when they sue, it is usually because they have received bad information from an uninformed attorney or they are angry because the market did not go the way they hoped and are looking for someone to blame so they do not have to be responsible for the investment decisions they made.
Whether or not most registered reps, or financial planners will admit or acknowledge it, every time a new deal is placed in front of a client the thoughts and fears of; “Did I do everything I am supposed to do?” “Did the vendor do the proper due diligence?” “Did my firm explore this enough?” “Did I do the right thing?” “Will this person sue me if things go wrong?” “Does this guy really know what I am talking about?” “Did they really review and consult with an attorney or their accountant about this deal?” And many more questions race through your mind and can effectively inhibit your performance.
This “background noise” is devastating to your business.
FA Risk knows what the experience of that background noise is like. It is our position and our stand that you free yourself from that background noise and increase your performance.
If you could increase your business by 10% 15% or 20% would that make a difference to you, your family, or your business?
How much time do you spend in that background noise, thinking of clients and whether they understand something or not?
How much time do you spend looking for a document you should have immediate access to, calling into your compliance officer for an answer and then get their voicemail?
How long does it take to get information?
By giving you access to tools, education, ideas and concepts you will be able to streamline your business and enhance the relationship with your clients.
Becoming a member means working diligently to not only build a strong business, but also to protect it. You've worked hard to attain success, and litigation can destroy that hard work and cause needless setbacks, and in some cases, complete destruction.
Your membership includes a proactive approach to protect your business and comprehensive proven tips to help you prevail in the event of a litigation.
The Problem You Face
You are a successful financial professional. Your gross revenue is over $440k per year. You have a great family. You own a beautiful home, drive an expensive car, are active in your community and send your children to the best schools.
Something happens, a deal goes sour, someone feels let down...
You lose your business, your spouse, you file for personal bankruptcy due to a litigious attack from a client. The hard thing to swallow is this client is/was a friend.
Does this story sound familiar? This is a TRUE story, and every day there are more stories like them.
Do you think your lifestyle is not in jeopardy from a litigious attack?
Do you think you are immune from litigation?
Think again.
Financial Professionals are now the NUMBER ONE litigious target.
Litigation is the #1 reason a Financial Professional or a Financial Firm will go out of business. The majority of business bankruptcies and personal financial heartache result from something totally unexpected. Most litigious attacks are unexpected. In light of the current economic uncertainty, clients are looking to their Financial Professional not just for financial help, but also – financial blame.
Understanding a Problem is the First Step to Solving it.
In most all metropolitan markets, injury lawyers are shifting focus from soliciting injury lawsuits to soliciting clients to sue their financial advisor. Did you know over 14,000 web sites now advertise for the same result? Shocking, but true.
This adverse ad campaign is compounding and includes billboard, Internet, television and financial periodicals. Recently, Money Magazine’s lead article was entitled; “Should You Sue Your Broker?” (For the record, Money Magazine boasts over 90% readership by the investing public.) The actual article was entitled; “Sue Your Broker” which included 6 pages of step-by-step instructions on how to implement a legal attack against a financial advisor.
Important issues:
- Complaints against financial professionals are up over 100% from the same time a year ago.
- Failure to supervise claims are up over 34% from the previous year
- The majority of claims filed are groundless
- 90% are groundless claims and are settled because the financial professional is not prepared to defend.
- Arbitration's are up over 25%
- The average legal costs to defend against a complaint are now $42,000 - $50,000 USD and rising – and that is if the case does not go to arbitration
- This upward trend is expected to continue over the next several years.
Why is the Financial Professional the #1 litigious target?
The answer may surprise you. This is not a matter of guilt or innocence, but strictly economics. Simply put, it’s much easier to get an expeditious economic settlement from a financial advisor rather than the medical profession whom they've attacked for years.
Injury lawyers have been taking this lucrative approach for decades. The injury lawyer forces settlement for a contingency percentage of the economic settlement. This trend has now migrated to the financial profession. There’s a major difference between a one-time injury settlement and a financial professional settling a groundless attack for economic reasons. Being able to mount a strong defense and being prepared will mitigate the chances of being considered an easy target.
Unlike medical doctors – financial professionals have clients in different states, provinces and countries. If a client sues, venue is usually granted to the client in their venue. This forces the financial advisor to go to that venue to defend himself. This becomes extremely expensive.
The financial advisory business is extremely complex and specialized especially when it comes to legal issues. The different areas of expertise a Financial Advisor must deal with are more complex than most any profession. The following are just a few of the legal complaint categories:
- Elder abuse
- State and Federal SEC inquiries
- Regulatory and SRO inquiries
- Tax
- Insurance
- Fraud
- Misrepresentation
- Family and Estate issues
- Fiduciary obligations
- Contracts and much more…
Most often, the solution to a problem is preparation for that "Just in Case" moment. To effectively prepare, you must have knowledge and instruction.
FA RISK Management prepares you, educates you, and stands with you!
In the event of a litigious attack you will be able to respond to any complaint powerfully and will benefit by powerfully managing your other clients and your practice and mitigate the losses typically experienced by other financial professionals who are not members.
Now is the time to Prepare! Now is the time to solve this Problem!
Solution
The First Step to Solving a Problem is Preparation
Procrastination is a habit that's hard to break, however, as a financial professional an attitude of procrastination could be disastrous to your business and your personal life.
We cannot stress the point enough that you must immediately focus on the proactive steps outlined in this e-defense Manager and begin implementation of these ideas and concepts into your practice.
This manager will help guide and prepare you in the MOST CRITICAL AREAS of your business. In these critical areas you must be able to produce verifiable documentation in order to defend against a litigious attack.
EXAMPLES OF CRITICAL AREAS:
- Client Evaluation
- Client Suitability to Products & Services
- Compliance to Insurance Agency and Broker Dealer Rules
- Due Diligence
- Compliance to State & Federal Regulatory Laws & Rules
- Documentation & Disclosure
- Ethics & Professional Responsibility
Inadequate preparation or documentation in any one of these areas could mean the difference between winning or losing a claim and keeping or losing your business.
Every section of this Manager is designed to provide a "road map" for easy reference. All procedures are designed to be quickly incorporated into your own financial practice.
Back to Discover FA Risk
Protect Yourself
Learn more about our unmatched risk management benefits
New Article
Read the latest article on BICE, the Best Investment Contract Exemption, is a trap.
FINRA Rule Filings
SEC Proposed Rules
@FArisk12
-
January 1, 1970via @
Testimonials
Think It's your B/D or your Insurance Company or Your FMO or your E&O carrier?
Pete Borowski
I've got news for you. When the problems come and they will (if you see enough people) You'll quickly learn they will cover their own butts and walk on you. I have been in the business for 30 years and the top 1% of Insurance and Financial Advisors with 20 years of Lifetime Qualification for MDRT. You need to know that a truly knowledgeable caring group of people are in your corner to protect your ASSets! That would be your membership in FARisk. You don't want to be alone in this game!"
30 year veteran of the industry